Tuesday, 15 December 2015 13:01

Infant formula to feed Synlait profits

Written by 
infant formula and nutritionals will dominate Canterbury milk processor Synlait's sales over the next seven months. infant formula and nutritionals will dominate Canterbury milk processor Synlait's sales over the next seven months.

Infant formula and nutritionals will dominate Canterbury milk processor Synlait's sales over the next seven months.

Synlait Milk chairman Graeme Milne told shareholders at its annual meeting last week that the financial year ending July 2016 will see strong growth in nutritional sales volumes and showcase the benefits of a value added strategy.

Milne says the focus for the current financial year is on developing nutritional and infant formula products with key customers.

"With the successful commissioning of our third large-scale spray dryer in September and current increases in the sales volume of consumer packaged infant formula, I stand by my previous statement that our profitability will be in advance of anything achieved to date," he told shareholders.

Milne discussed global factors behind the decreases in international dairy market pricing; he says global dairy prices have decreased further since July this year to unsustainably low levels from a New Zealand farming perspective.

"It's important to understand our profitability is not directly affected by international dairy prices," he says.

"It impacts our revenue, but the value we create by differentiating milk inside the farmgate and throughout the manufacturing process creates a margin for our business that is essentially independent of the global pricing of commodities," says Milne.

"This margin is most evident in our nutritional products. The highlight in this category now is consumer packaged infant formula, which we expect to increase fourfold in volume in FY16."

Synlait Milk managing director and chief executive officer Dr John Penno pointed to the completion of Synlait's growth initiative programme as a key milestone in the business' strategy to make more from milk.

"We're now geared up to achieve our strategy. With one of the largest and highest specification infant formula production sites globally, we've created an integrated supply chain from source to our customers," says Penno.

"We will continue to partner with leaders in the infant formula industry, developing strong customer relationships that support our growth targets in FY16 and the future."

Penno invited shareholders to focus on the volume of nutritional sales as a key performance indicator for Synlait in FY16.

"Our total sales volume is set to grow from FY15's 97,800 MT to 122,500 MT in FY16. More than half of that growth will be the result of increased nutritional sales in consumer packaged infant formula, which carries a significant benefit in gross margin."

During the meeting all resolutions put to shareholders were passed. This included the re-election of Milne as a director; director fees will remain the same.

More like this

Synlait snag

OPINION: Canterbury milk processor Synlait's recovery seems to have hit another snag.

Editorial: Time for common sense

OPINION: The case of four Canterbury high country stations facing costly and complex consent hearing processes highlights the dilemma facing the farming sector as the country transitions into a replacement for the Resource Management Act (RMA).

Canterbury farmer saves time with spreader upgrade

With a focus on producing their own on-farm dairy feed requirements, it would be safe to say that the Fleming family are no strangers to a fertiliser spreader on their North Canterbury farm, near Culverden.

Feed help supplements Canterbury farmers meet protein goals

Two high producing Canterbury dairy farmers are moving to blended stockfeed supplements fed in-shed for a number of reasons, not the least of which is to boost protein levels, which they can’t achieve through pasture under the region’s nitrogen limit of 190kg/ha.

Featured

Fencing excellence celebrated

The Fencing Contractors Association of New Zealand (FCANZ) celebrated the best of the best at the 2025 Fencing Industry Awards, providing the opportunity to honour both rising talent and industry stalwarts.

B+LNZ launches AI assistant for farmers

Beef + Lamb New Zealand has launched an AI-powered digital assistant to help farmers using the B+LNZ Knowledge Hub to create tailored answers and resources for their farming businesses.

National

Machinery & Products

Tech might take time

Agritech Unleashed – a one-day event held recently at Mystery Creek, near Hamilton – focused on technology as an ‘enabler’…

John Deere acquires GUSS Automation

John Deere has announced the full acquisition of GUSS Automation, LLC, a globally recognised leader in supervised high-value crop autonomy,…

Fencing excellence celebrated

The Fencing Contractors Association of New Zealand (FCANZ) celebrated the best of the best at the 2025 Fencing Industry Awards,…

» Latest Print Issues Online

The Hound

A step too far

OPINION: For years, the ironically named Dr Mike Joy has used his position at Victoria University to wage an activist-style…

Save us from SAFE

OPINION: A mate of yours truly has had an absolute gutsful of the activist group SAFE.

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter